CMA Launches Major Consumer-protection Drive Focused On Online Pricing Practices

Since April, the CMA has been carrying out a sector-wide review of pricing transparency, examining how more than 400 businesses across 19 industries present prices, promotions and fees to consumers. Building on this work, the regulator has now opened investigations into a series of practices it views as presenting the greatest risk to consumers. These include:

• Hidden or late-added charges, appear only late in the purchase process, rather than being included in the initial price shown;
• Promotions presented as time-limited, including countdown clocks or "last chance" offers that may not reflect genuine deadlines;
• Pre-selected extras or services, which can result in consumers buying optional services without realising; and
• Sales techniques designed to create undue pressure, potentially influencing purchasing decisions.

The CMA is taking a dual approach: pursuing formal enforcement against certain businesses while issuing advisory letters to around 100 others, accompanied by updated guidance outlining what compliant pricing behaviour looks like.

Enforcement action

The CMA has opened investigations into eight companies it suspects may have breached consumer protection law in relation to fees, time-limited promotions or default opt-ins.

• StubHub and viagogo are being reviewed in connection with whether mandatory ticket fees are included upfront or added only at a late stage.
• AA Driving School and BSM are under investigation for how they present compulsory charges, specifically whether the total price shown at the outset reflects all unavoidable fees.
• Gold's Gym is being assessed for the way it introduces its joining fee during the sign-up process, including whether this fee should have been included in the advertised membership price.
• Home-wares and appliance retailers Wayfair, Appliances Direct and Marks Electrical are being examined regarding:
  • Whether their time-limited deals truly ended when advertised; and
  • Whether optional extras were pre-selected by default.

Why this matters

This development significantly raises the risk profile for any organisation selling goods or services online. Under the DMCCA, the CMA can now issue decisions and impose remedies without needing to initiate court proceedings. Where the regulator identifies an infringement, it can require businesses to compensate affected customers and impose penalties of up to 10% of global turnover, a level of exposure that few companies can afford to ignore.

The CMA's review also spans industries not traditionally associated with consumer-law scrutiny, including ticketing, fitness, home-wares and driving instruction. The clear message is that any business operating an online sales journey or subscription model should expect its pricing practices to be examined.